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A 2007 amendment to Montana's campaign-finance laws allows donors to give up to $160 each election to candidates running for the legislature. Even with that increase, Montana legislative campaigns continue to operate under the most stringent campaign-contribution limits in the nation. To assess the effect of the limits on money in Montana's legislative races, the National Institute on Money in State Politics compared the campaign-contribution data for the six election cycles since the implementation of I-118 with the three cycles prior to the reform.

The opinions and views in the report do not necessarily state or reflect those of the Institute's funders.

Lowest Limits in the Land

A 2007 amendment to Montanaâ€™s campaign-finance laws allows donors to give up to $160 each election to candidates running for the legislature â€” $60 more than they could give in 2004 or 2006. Even with that increase, Montana legislative campaigns continue to operate under the most stringent campaign-contribution limits in the nation.

In November 1994, Montana voters passed Initiative 118 that, in addition to five other reforms, reduced Montanaâ€™s already low contribution limits from $250 for House candidates and $400 for Senate candidates each election cycle to $100 per election for both House and Senate candidates.1

The 1994 law also re-defined an election to mean either a primary election or a general election, while previously an election counted as both the primary and general elections. In other words, beginning with the 1996 election cycle, legislative candidates could only accept a maximum of $200 from a single contributor in a cycle â€” and only if the candidate had a viable primary election opponent. Otherwise, they were restricted to $100 per contributor for the entire election cycle.

The limit remained at $100 per election until the 2003 Legislature increased it to $130 for the 2004 and 2006 elections. Then, during the 2007 legislative session, a law passed calling for periodic increases every election cycle based on the Consumer Price Index (CPI).

To assess the effect of campaign-contribution limits on the money in Montanaâ€™s legislative races, the National Institute on Money in State Politics compared the campaign-contribution data for the six election cycles since the implementation of I-118 with the three cycles prior to the reform. The analysis shows that:

Even when adjusted for inflation, contributions to legislative candidates increased after reform despite the lowered limits.2

Lower contribution limits did not limit the participation of contributors, rather that participation increased 51 percent â€” from an average of 5,500 contributors per election cycle pre-reform to 8,300 contributors post-reform.

More people gave more money after reform. Individual contributors have consistently remained the largest contributing group of donors before and after reform, accounting for 56 percent before and 60 percent after.

Lower limits did not reduce the number of contributions legislative candidates received. The total number of contributions rose two-thirds â€” from an average of 9,000 contributions to 14,000 contributions.

Historically, the average contribution to Montana legislative candidates has been far below the allowable amount. Even before reform, the average contribution was $169 â€” well below the individual allowable $250 and $400 limit to House and Senate candidates, respectively. But in the six cycles since the passage of I-118, the average contribution was $110 â€” less than half the allowed $200 to $260.

The Instituteâ€™s analysis also found that the I-118â€™s proponentsâ€™ hopes of solving â€śthe problem of too much money in Montana politicsâ€ť did not materialize.3
Even after adjusting for inflation, contributions to Montana legislative candidates between the pre- and post-reform period increased by 3 percent.

TABLE 1: TOTAL CONTRIBUTIONS TO LEGISLATIVE CANDIDATES, 1990-2006

CYCLE

TOTAL

1990

$1,461,448

1992

$1,264,468

1994

$1,864,020

PRE-REFORM AVERAGE

$1,529,979

1996

$1,177,448

1998

$1,238,672

2000

$1,527,263

2002

$1,478,794

2004

$1,758,694

2006

$2,240,124

POST-REFORM AVERAGE

$1,570,166

CONTRIBUTORS AND CONTRIBUTIONS

In the 10 years between the imposition of stricter limits and the 2006 election, more contributors participated in financing Montana legislative campaigns than ever before. The number of contributors increased 51 percent â€” from an average of 5,500 contributors per election cycle before reform to 8,300 contributors after.

And, the average number of contributions rose more than two-thirds, from an average of 9,000 contributions each election in the pre-reform period to more than 14,000 per election after reform.

No one had predicted the sharp rise in the number of contributors. Also unanticipated was the remarkable increase in the number of contributions that occurred. But, as expected and due to the lower limits imposed, the size of the average contribution decreased from $169 to $110.

TABLE 2: CONTRIBUTORS, 1990-2006

CYCLE

NUMBER

AVERAGE $

1990

4,777

$306

1992

4,972

$254

1994

6,601

$282

PRE-REFORM AVERAGE

5,540

$281

1996

5,551

$212

1998

6,253

$198

2000

7,547

$202

2002

8,102

$183

2004

9,859

$178

2006

12,832

$175

POST-REFORM AVERAGE

8,357

$188

TABLE 3: CONTRIBUTIONS, 1990-2006

CYCLE

NUMBER

AVERAGE $

1990

8,157

$179

1992

7,728

$164

1994

11,249

$166

PRE-REFORM AVERAGE

9,045

$169

1996

10,114

$116

1998

11,034

$112

2000

13,043

$117

2002

13,742

$108

2004

16,240

$108

2006

21,662

$103

POST-REFORM AVERAGE

14,306

$110

HOW REFORM AFFECTED DONORS

Despite claims by I-118 proponents that â€śmoney from special interests and the wealthy is drowning out the voice of regular people in Montana politics,â€ť4
more â€śregularâ€ť people gave more money after reform. The number of individuals giving swelled from nearly 5,000 before reform to more than 7,800 after reform.

Individual donors have consistently remained the largest contributors to Montana legislative races, both before and after reform. At no time during the nine cycles studied did the money from individual contributors drop below 55 percent of the overall total given, underscoring the extent of grassroots involvement. Pre-reform contributions from individual donors accounted for 56 percent of the money raised by legislative candidates. That figure increased to 60 percent post-reform.

TABLE 4: CONTRIBUTIONS FROM INDIVIDUALS, 1990-2006

CYCLE

NUMBER OF INDIVIDUALS

TOTAL FROM INDIVIDUALS

TOTAL CONTRIBUTIONS

% OF TOTAL

1990

4,368

$799,235

$1,461,448

55%

1992

4,523

$714,343

$1,264,468

56%

1994

6,009

$1,045,754

$1,864,020

56%

PRE- REFORM AVERAGE

4,967

$853,111

$1,529,979

56%

1996

5,035

$675,972

$1,177,448

57%

1998

5,773

$743,094

$1,238,672

60%

2000

7,047

$857,132

$1,527,263

56%

2002

7,567

$861,943

$1,478,794

58%

2004

9,329

$1,055,166

$1,758,352

60%

2006

12,219

$1,471,087

$2,240,074

66%

POST-REFORM AVERAGE

7,828

$944,066

$1,570,101

60%

The so-called â€śwealthyâ€ť donors that I-118â€™s authors claimed dominated the system did not have the financial influence the measuresâ€™ proponents assumed â€” before or after reform. In fact, the 10 largest individual donors continued to represent a small percentage of the money raised by legislative candidates. The post-reform combined totals of the 10 largest individuals represent only 1 percent of the total raised â€” down from 3 percent of the total before reform.

OTHER CONTRIBUTORS

Highlighting the fact that individuals, as a group, have dominated the contributor lists of Montana legislative candidates is that the second largest contributing group â€” self-financed candidates â€” accounted for 15 percent and 19 percent of the total raised pre- and post-reform respectively.

Overall, the average post-reform contributions from candidates giving to themselves increased by 11percent â€” from a pre-reform average of $222,000 to a post-reform average of $304,000.

TABLE 5: CONTRIBUTIONS BY CONTRIBUTOR TYPE, 1990-2006

CONTRIBUTOR TYPE

PRE-REFORM AVERAGE

POST- REFORM AVERAGE

Individuals

$853,017

$944,066

Candidate self-finance

$222,237

$304,204

Businesses and special-interest groups

$201,565

$135,470

Party committees

$104,628

$72,415

Labor organizations

$106,232

$54,665

Candidates and candidate committees

$42,300

$59,288

TOTAL

$1,529,979

$1,570,108

Candidates and candidate committees â€” those candidates and their committees that give to other candidates â€” increased their contributions after reform by 40 percent â€” from an average $42,300 per cycle before reform to $59,000 after. However, the contributions from this group have never represented a significant amount of the total contributions.

Three contributing groups gave less after reform:

Contributions from businesses and special-interest donors dropped from the three-cycle pre-reform average of $201,000 per cycle to $135,000 after reform â€” a 33 percent decrease.

The group that took the biggest hit from I-118 was organized labor. Contributions from labor organizations had been dropping steadily since the 1990 cycle, but the pre-reform average contribution from unions collectively was $106,000 per cycle. That dropped to the post-reform average of $54,665, accounting for a 49 percent drop in labor donations.

Before reform, political party committees gave an average of $104,000 per cycle. After reform, that average dropped to $72,000 â€” accounting for a 31 percent decrease between the pre- and post-reform periods.

1. The reform included: 1) banning the practice of carrying surplus funds into future elections â€” first-time candidates and incumbents would start each election cycle with zero balances; 2) forbidding personal use of surplus funds. Candidates were given several options for disposing of surplus funds, either by returning it to the contributor, giving it to charity or a political party, or, if elected, establishing a constituency account for communications related to their elected office; 3) requiring all in-kind contributions (non-monetary donations of time, services, office space, supplies, etc.) be considered the same as cash contributions and therefore included within the aggregate limits; 4) requiring contributions given to candidate-controlled committees be added together to prevent candidates from circumventing the limits by creating more than one committee and then receiving the maximum allowable amount in each committee; 5) requiring that political party contributions be added together, as well as limiting the aggregate amount candidates could accept from all political party committees. In other words, party committees cannot channel money to candidates through other party committees to avoid limit restrictions.

2. To adjust for inflation, all totals and tables in this report are converted to 2006 dollars using tables prepared by Robert C. Sharâ€™s â€śConsumer Price Index (CPI) Conversion Factors 1800 to estimated 2016 to Convert to Dollars of 2006,â€ś (c) 2007 Robert C. Sahr, Political Science Department, Oregon State University, Corvallis, OR, Rev. 01/18/2007.